On September 21, 2020, the exercise period ends for Saniona’s warrants of series TO 2, which can strengthen the company by approximately SEK 37 million before issue costs. Holders of TO 2 have the right to subscribe for one new share in Saniona for each warrant at a price of SEK 25 per share. BioStock reached out to Saniona’s CEO Rami Levin, who has made steady progress building the Saniona team and advancing Tesomet and other potential treatments for rare diseases.
On January 10, the biotechnology company Saniona hammered out a comprehensive financing plan of up to SEK 158 million. Part of this financing solution consisted of two warrants, of which the first – TO 1 – was implemented in May and brought in SEK 24 million.
The exercise period for the second warrant – TO 2 – ends on 21 September 2020, which could add an additional SEK 37 million to the company.
In June, a private placement was also carried out, whereby Saniona received a gross payment of USD 65 million (approximately SEK 567 million). RA Capital Management acted as anchor investors in the private placement, which was also subscribed by Pontifax Venture Capital and New Leaf Venture Partners together with other American and international sector specialists as well as the Swedish pension funds Andra AP-fonden (AP2), Tredje AP-fonden (AP3) and Fjärde AP-fonden (AP4).
In addition, on June 22, the company raised SEK 22 M (USD 2.3 million) through the sale of shares in Scandion Oncology, a company that was previously spun off from Saniona.
The funding supports clinical advancement
Strengthened by this funding, the road is paved to advance the primary drug candidate Tesomet to registration and potential market approval as the world’s first treatment for the two rare diseases, hypothalamic obesity (HO) and Prader-Willi syndrome.
Another important goal, in parallel with accelerating the company’s clinical projects, is to attract competent individuals to key positions at the new Boston headquarters. On August 24th, it was announced that the executive team will expand with three industry veterans: Jason A. Amello will take on the role of Chief Financial Officer, Trista Morrison will become Chief Communications Officer and Linea Aspesi will be the new Chief Human Resources Officer. All three will be part of Saniona’s management team. Read more here.
Warrants of series TO 2 in summary
The current warrant TO 2, which subscription period runs between 7 and 21 September, can be summarized as follows.
- Subscription price: Each warrant of series TO 2 gives the holder the right to subscribe for one (1) new share in Saniona at a price of SEK 25.00.
- Issue volume: Upon full exercise of all warrants of series TO 2, Saniona will receive approximately SEK 37 million before issue costs.
- Valuation (pre-money): Approximately SEK 1,526 million.
- In order for the warrants not to expire, they must be exercised or sold no later than 17:00 CEST on 21 September 2020.
Folders and information sheets are kept available here.
BioStock contacted Saniona’s CEO Rami Levin for a comment on his views of Saniona’s recent financings and progress.
Rami Levin, you entered 2020 with a comprehensive financing plan. How much capital do you estimate it will take to take Tesomet all the way to market in hypothalamic obesity (HO) and Prader-Willi syndrome (PWS) respectively?
– As you noted, Saniona has recently been able to access a significant amount of capital through our USD 65 million (approximately SEK 567 million) private placement, and also through the exercise of warrants and the sale of shares in our Scandion Oncology spin-out. This financing will allow us to advance Tesomet to registration for approval in hypothalamic obesity (HO) and Prader-Willi syndrome (PWS), and also to move our early-stage pipeline into the clinic and build our organization in the US.
– We are already making significant progress on each of these goals, and we believe this progress will create significant value for patients and for shareholders.
In June, you carried out a large-scale private placement with a discount of 45 percent, where you received approximately SEK 567 million. The other day it was announced that one of these institutional investors, the Second AP Fund, had sold between half and two thirds of the 1.9 million shares they bought. The reason for the sale, which pushed the share price down 22 percent in one month, was stated to be that the fund had gained too much weight in Swedish shares. what are your thoughts on this?
– The primary reason we carried out the large-scale private placement was to provide Saniona with the capital needed to advance clinical trials of Tesomet and our other potential treatments for rare diseases. This goal was successfully achieved. Another very important motivator for the financing was the opportunity to strengthen our shareholder base with experienced, healthcare-focused institutional investors who believe in the value Saniona can create over the long term.
– This goal was also achieved. Of course we are disappointed to have later learned that AP2 have ultimately decided to sell some of their shares. This is contrary to what we were led to believe by inviting them into the capital raise. Having said that, I am very pleased with the quality of investors who participated in our recent financing, and from our discussions I believe that they see the long term value potential in Saniona.
Do you have an ongoing dialogue with the new investors? What is attracting them with the Saniona story?
– I communicate frequently with investors through conference presentations, press releases, meetings, phone calls and emails. During the recent private placement, as well as post the deal I had the opportunity to meet with many investors, and I was very encouraged to see their enthusiasm for the work we are doing at Saniona. In particular, they see the unmet need in HO and PWS, and they are encouraged by the data from our Phase 2 trials of Tesomet in these indications. They also expressed significant optimism for our earlier stage pipeline programs.
– Moving forward, I look forward to enhancing our investor communications with the support of the growing Saniona team. I recently hired Trista Morrison as Chief Communications Officer, and a significant area of focus for her will be ensuring that we communicate effectively and transparently. Additionally, I recently hired Jason Amello as Chief Financial Officer, and he will help ensure that we are specifically making information understandable and accessable to the investor community.
»We have been engaging in encouraging discussions with the FDA regarding the design of our pivotal programs. We expect to initiate these studies in Q1 2021, with the goal of bringing to market the first approved medicine to treat these diseases« – Rami Levin, CEO Saniona
You are approaching the crucial pivotal studies within the two primary indications HO and PWS – two diseases where there are currently no treatment options. What do the clinical data you have today suggest about the candidate’s potential chances of success?
– Our Phase 2 studies in hypothalamic obesity (HO) and Prader-Willi syndrome (PWS) both achieved their endpoints. In HO, Tesomet was safe and well tolerated, with statistically significant improvements in body weight, waist circumference, and glycemic control observed with Tesomet treatment compared to placebo. In PWS, Tesomet was also safe and well-tolerated. In adult patients, Tesomet provided clinically meaningful weight loss and a significant reduction in hyperphagia. In adolescent patients, Tesomet demonstrated a dose dependent effect on weight and hyperphagia.
– Based on these data, we have been engaging in encouraging discussions with the FDA regarding the design of our pivotal programs. We expect to initiate these studies in Q1 2021, with the goal of bringing to market the first approved medicine to treat these diseases,
In conclusion, how convinced are you that you will succeed in taking Tesomet all the way to the patients, and why?
– Hypothalamic obesity (HO) and Prader-Willi syndrome (PWS) are very difficult diseases to treat. Discovering and developing new medicines for diseases like this is incredibly difficult, and there are no guarantees. That said, the reason I joined Saniona in January – and the reason we keep recruiting experienced executives to our team – is that we see the data with Tesomet and we believe we have a chance to make a difference in the lives of these patients and their families.
The content of BioStock’s news and analyses is independent but the work of BioStock is to a certain degree financed by life science companies. The above article concerns a company from which BioStock has received financing.